December 2021 Auto Sales: Demand for PV, CV improves; 2W, tractor in red – ET Auto

In the last month of 2021, the dispatches for the industry continued to remain a mixed bag.

New Delhi: The year 2021 has come to an end but not many of the challenges it has borne. From COVID restrictions, supply chain bottlenecks, global semiconductor shortage, faltering production schedules, increase in commodity prices, rising vehicle prices, to the spike in fuel prices still persist. As in the rest of the world the automobile industry in India also has been traversing through a difficult road. However, there was some solace in exports and in the sales of electric vehicles in the year gone by. In the last month of 2021, the dispatches for the industry continued to remain a mixed bag. While the consumer sentiment remained positive for carmakers, its recovery was hampered by the ongoing chip shortages. Two wheelers and tractors remained in the red. However, commercial vehicle wholesales to dealers are turning to green.

The following is a segment-wise report of the vehicle sales in December 2021.

Passenger vehicles

Country’s largest carmaker Maruti Suzuki India Limited (MSIL) reported a 13% drop in its domestic PV dispatches to the dealers. Total domestic sales (including passenger vehicles and light commercial vehicles) stood at 126,031 units in December 2021, as against 146,480 units in the same month in the previous year.

According to the carmaker, the shortage of electronic components had a minor impact on the production of vehicles during last month. The shortage primarily affected the production of vehicles sold in the domestic market. The company took all possible measures to minimise the impact.

An exceptional development during the month was a change of positions. South Korean Hyundai Motor India, which is usually the second largest carmaker in the market saw a drop in sales and homegrown Tata Motors grabbed the spot for the first time in about a decade. Tata sold 33,044 ICE cars and 2,255 electric cars in December 2021.

Shailesh Chandra, President, Passenger Vehicles Business Unit, Tata Motors Ltd, said, “The PV business growth journey of Tata Motors continued and set several new milestones during the third quarter of FY22 despite witnessing a shortfall in production due to the ongoing semiconductor crisis. Decade-high quarterly (Q3) and monthly sales of 99,002 units and 35,299 units respectively were recorded.”

Records were also created on the EV front as sales witnessed a new peak of 5,592 units in Q3 FY22. Consequently, EV penetration touched 5.6% of PV Sales during the quarter versus 1.8% in the same period last financial year. Going forward, semiconductor supplies will remain the key source of uncertainty. Additionally, the impact of the new strain of Covid needs to be closely tracked. We will continue to work on a business agility plan and take proactive actions to mitigate these risks, he said.

Domestic SalesDecember 2021December 2020% change
Maruti Suzuki1, 23, 0161, 40, 754-13
Tata Motors35, 29923, 54550
Hyundai32, 31247, 400-32
Mahindra & Mahindra17, 72216, 18210
Toyota Kirloskar10,8327,48745
Honda Cars7,9738,638-8
Kia India7,79711,818-34
Nissan India3,0101,159159
Skoda Auto3,2341,303148
MG Motor2,5504,010-36

Kia India said it foresees the supply chain constraint to stay intact in early 2022 but hopes that the semiconductor production and supply will start improving from second quarter onwards. The company sold 4,012 units of Seltos SUV, followed by 3,578 units of Sonet and 207 units of Carnival. V Wiseline Sigamani, Associate General Manager (AGM) (Sales and Strategic Marketing), TKM, said, “The latter half of the year saw demand picking up and the same can be attributed to factors aiding pent-up demand initially, and further fuelled by demand due to festive season. Currently the surge in demand, though, is sustaining on its own.”

Two-wheelers

With the slowest recovery of the rural sector after the second COVID wave, this segment has not taken off to reach the year-ago level. Added to this was the exorbitant rise in fuel prices which has subdued the demand of the entry-level affordable motorcycles and scooters in particular.

Country’s largest two-wheeler maker Hero MotoCorp reported a decline in its domestic sales in December, and said it continues to monitor the on-ground situation, although localized restrictions imposed by certain states in the wake of rising Omicron cases will continue to restrict the customer movement.

Domestic SalesDecember 2021December 2020% change
Hero MotoCorp3, 74, 4854, 25, 033-12
HMSI
TVS Motor1,46,763 176,912-4
Bajaj Auto1,27,5931,28,642-1
Suzuki Motorcycles
Royal Enfield65,18765,4920.46

Commercial vehicles

CV sales reflect the state of the country’s economy. As compared to last year, the OEMs witnessed a growth in sales volumes in December 2021, except Ashok Leyland.

Girish Wagh, Executive Director, Tata Motors Ltd, said domestic CV sales in Q3 FY22 at 90,529 units were about 15% higher than in Q2 FY22 and 10% higher than in Q3 FY21.

According to him, the retail was ahead of wholesale by 15% in December 2021, enabling inventory alignment. The SCV and ILCV segments continued to benefit from the growth in e-commerce and the increasing need for last-mile delivery. Construction and infrastructure spending by central and state Governments plus rising activity in sectors such as mining, petroleum-oil-lubricants and allied industries facilitated the demand for M&HCVs.

“Going forward, we expect the situation to remain fluid as the semiconductor shortage continues, instances of Covid begin to rise and underlying demand continues to remain under pressure. We are keeping a close watch on the evolving situation and sharpening our agile, multi-pronged approach to fulfil customer orders,” he said.

Domestic SalesDecember 2021December 2020% change
Tata Motors31, 00829, 8854
Mahindra & Mahindra18, 41816, 79510
Bajaj Auto18,38610,96468
TVS Motor 15,541 13,84512
Ashok Leyland11,49311,855-3
VECV5, 3444, 27425

Ashok Leyland reported 4% YoY increase in its M&HCV truck sales to 6,137 units and 151% rise in M&HCV bus sales to 615 units during the month. However, it saw a 17% drop in domestic LCV sales at 4,741 units as against 5,682 units in December 2020.

Tractors

Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra Ltd, said, “Degrowth in December has been on account of a combination of factors, including high base of last year and both delayed and very heavy rainfall in some geographies. We expect momentum to recover in the coming months on account of good progress of Kharif procurement bringing liquidity in the hands of farmers and Rabi acreage showing signs of growth over the previous year.”

The company sold 1582 tractors in the exports market, marking a growth of 27% over the previous year.

Domestic SalesDecember 2021December 2020% change
Mahindra & Mahindra16, 68721, 173-21
Sonalika
Escorts4,0807, 230-43.5

As per Escorts, rural cash flows started to improve, but industry wholesales were impacted during the month of December 2021 due to high base last year. “Going forward, all macroeconomic factors including healthy water reservoir level remain in favour of the tractor industry. We have taken price increases, but rising inflation continues to be a worry,” Sikka said.

(This is a developing story. We will keep updating the numbers as the OEMs release their sales data.)

Also Read:

Tata Motors overtook Hyundai to become the second-largest seller of passenger vehicles in the domestic market for the first time in close to a decade in December 2021.

The automaker posted total sales of 153,149 units last month. They include domestic sales of 126,031 units, sales to other OEMs at 4,838 units and exports of 22,280 units.


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